Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—EDPa: Limitation on Insurance Coverage Not a Violation of Pennsylvania Law, (Dec 17, 2012)
Organizations Mentioned:Liberty Mutual Group, Inc.
By Jody Coultas, J.D.
An insurance company was not liable under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (CPL) for limiting a policy holder’s coverage to $10,000 for a sump pump failure, according to a magistrate judge in the federal district court in Philadelphia (Viscounte v. Liberty Mutual Group, December 14, 2012, Sitarski, L).
After the policy holder’s basement flooded due to a failed sump pump, the policy holder filed an insurance claim. The insurance policy contained an endorsement that limited coverage to $10,000 for sump pump overflows. The company issued the policy limit to the policy holder. However, the policy holder argued that it was entitled to full coverage under the insurance contract’s general policy and should not have been limited to $10,000 in coverage.
Malfeasance v. Nonfeasance
Under the CPL, a party may be liable for malfeasance, or the improper performance of a contractual obligation. Nonfeasance, the failure to perform a contractual obligation, is not actionable. The insurance company’s refusal to provide full coverage constituted nonfeasance and was, therefore, not actionable under the CPL. The policy holder’s attempt to characterize the actions at issue as improper conduct was dismissed.
The case is No. 11-cv-6387.
Matthew B. Weisberg (Weisberg Law PC) for Jonathan Viscounte. Chester F. Darlington (Bennett Bricklin and Saltzburg) for Liberty Mutual Group.
Cases: StateUnfairTradePractices PennsylvaniaNews